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Is contactless truly safe?

Last year, fraud of contactless cards resulted in a total loss of £1.18 million for people all across Britain. This figure is a dramatic increase from the year before, in which the amount lost was £711,000.

With the rise in popularity of contactless cards between 2017 and 2018, however, this is to be expected. The number of store transactions made by contactless cards across the UK went from 30% in 2017 to 52% in 2018, with it seeming that the crime based around it has risen in a similar amount.

 

How Is Contactless Fraud Performed?

The contactless card is seen as a double-edged sword due to its convenience. Whilst it results in not needing to waste as much time as the slower chip and PIN method, it also sacrifices the security that option provides. Cyber criminals can use scanning technology when in range of a contactless card in order to gain a reading of the data from a card’s built-in chip to use for themselves. Alternatively, they can make a contactless purchase of up to £30 with a stolen card.

Making such relatively small payments quickly through contactless cards will result in more of a fast-paced scattergun approach. This has its pros and cons, as thieves will generally spend less overall with contactless as they can’t go out and buy something expensive, but there is always a small chance the victim doesn’t notice the small change in figures when checking their balance, and will potentially take longer to cancel their card.

The amount of contactless fraud cases in the UK increased from 1,440 throughout all of 2017 to 2,739 between January and October of 2018 alone. The latter figure even accounts for around 50% of contactless card crime throughout the past five years alone.

 

Is Contactless a Flawed System?

The rise of crime related to contactless cards raises a question in some eyes – is contactless worth using?

The answer to that, in short, is yes. Whilst fraud can be expected to rise with contactless cards, crime is something that will always be inevitable, and criminals will find methods to perform their deeds regardless of the walls put up to prevent them. In order to perform the fraud in the first place, a criminal would require the necessary technology to scan the card, which isn’t something that happens every day, as they’re hard to get a hold of, and even harder to look natural with.

In response to the fraud problem, UK Finance, a representative of around 300 banking and finance firms, weighed in on the matter. According to them, a card system is necessary to perform contactless fraud and it isn’t something that can happen by just being next to someone.

They also made it apparent that in the grand scheme of things, contactless fraud is a fairly minor part of overall financial crime. The figure of contactless card crime only made up 3% of total card fraud in 2018, with the total amount being lost to card fraud in 2018 being as high as £281.2 million.

 

The Fact and Fiction of Contactless Crime

Beyond that, the common problems raised towards contactless cards can often be arguable at best. Whilst there were tests made by the consumer group Which? to steal contactless details with a card reader, it’s important to remember this was a test conducted in 2015. Since then, further advancements have been made in ensuring that payment methods in general are more secure.

Going back to the point of the £30 limit of contactless payments, this is probably the biggest reason contactless fraud isn’t’ as bad as other types.

It isn’t as though such transactions would go completely unnoticed either, with Giles Mason of the UK Card Association stating that: “Every card payment is fully traceable, right through to the recipient account,” in an interview with Tech Radar. He went on to add that whilst a thief could use a registered terminal connected to a retail account, that’s only a theoretical possibility and that “it would be easy to track the thief down.”

 

It’s also important to note that even if someone had the technology necessary to copy a card’s data, they would have to get past the interference that nearby metal objects would provide, which would be incredibly difficult to do in most commercial settings regardless of whether it’s a popular retail brand or local store. This overall means that contactless isn’t nearly as dangerous as the statistics may suggest.

 

Conclusion

Whilst evidence of contactless fraud is obvious, the problems with it are similar to problems you’d face with any method of payment. Overall, the increase of fraud can be chalked up to the increase in use, and companies are working around the clock to clamp down on this crime.

 

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The death of cash?

5.4 million people across the UK, or 10% of consumers, according to UK Finance, have made no more than one payment with cash per month last year. Compare this to 2017, in which 3.4 million people rarely used cash, and it’s clear that cash’s role as the main form of transaction is quickly fading away. This is backed up by only 4% of the population, or 1.9 million people, confirming they still use cash as their main payment option.

Overall, cash payments made up only 28% of payments made in 2018 and based on recent statistics, this number is expected to drop to 10% in a decade from now. This can be seen as quite a drastic change when little more than a decade ago in 2008, cash still made up 60% of payments.

 

The Change In Payment Options

With more bank branches and cash machines closing as time goes on, those that still use cash as their main source of money are facing a definite problem. This hasn’t been overlooked, with UK Finance working with the Joint Authorities Cash Strategy Group (JACS) to assure cash will still be in steady supply to those who still use it.

One major factor in this change in dynamics would be public transport having implemented technology capable of reading contactless cards and increasing the limit of such payments to £30 in 2015.

The main form of payment nowadays is the debit card, it is having surpassed cash in 2017 and retained this position in 2018, making up 38% of last year’s total payments. They are even estimated to make up 50% of all payments by 2024. As for contactless cards, they made up 16% of consumer payments in 2017 and 21% in 2018, showing that they too are on the rise. As of now, 69% of UK adults use contactless cards.

 

Statistics And Rise

Some payment options tend to be more popular depending on factors of age or location. For instance, people living in the UK’s south-east and East Anglia mainly use contactless cards, while this is less common in the north-west. Contactless is now being increasingly favoured by older people, with them being the payment option of 50% of those over 65 years old in 2017 and rising to 61% by 2018.

Adults make an average of 11 contactless card payments each month, expected to rise to 24 per month by 2028. 48% of adults in the UK also use mobile banking online according to UK Finance’s Payment Markets report, a fair rise from 41% in 2017.

8.5 million people have been registered on mobile payment services such as Google Play as of the end of last year. This shows that the percentage of the population using such services have risen from 2% in 2016 to 16% as of now.

The percentages of each region’s amount of contactless card users according to UK Finance are:

 

  • South East and East Anglia, 72%
  • Midlands, 71%
  • London – 70%
  • Wales – 70%
  • Scotland – 69%
  • South West – 67%
  • North East and Yorkshire – 66%
  • Northern Ireland – 66%
  • North West, 58%

 

As for the average number of payments made by UK adults each month last year:

 

  • 28 card payments, 11 of which are contactless
  • 17 cash payments
  • 6 direct debit payments
  • 3 payments made with online/mobile banking
  • 8 standing orders
  • 3 cheques

 

Stephen Jones, the chief executive of UK Finance, cited the change in consumer mentality as the reason for this drastic boost in contactless payments, it mainly coming down to only choosing select options out of a variety for the most convenient experience.

“More and more customers are now opting for the speed and convenience of paying with their contactless cards, or using mobile banking to check their balances and make transfers while on the move.”

 

Cash’s Remaining Importance

Stephen Jones also cited the change in technological advancements as a major reason for the sudden rise, though admitted maintaining cash is still important due to the preference for it as an option amongst several groups.

The chief executive of ATM network Link, John Howells, placed emphasis on the importance of changing the distribution of cash to make it easier to access for all customers, hoping to aid it through the help of the industry and regulators.

Whilst the age of cash is fading, it still holds importance within the economy. The expansion of cards should be encouraged, whilst there should also be an easy access to cash as an alternative option.

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Credit Card Security- Its History And Evolution

If you’re a younger reader, you may not realise the amount of changes that have happened to the card to get to where we are now. In truth, the evolution to Apple Pay and Contactless has been a steady one with lots of trial and error.

 

The Beginning

The credit card system’s origins can be traced back to a conversation between a restaurant owner and Frank McNamara, when the latter had left his wallet at home when needing to pay for a meal. His wife covered the tab and he left thinking there was definitely another way. When talking about how he didn’t want this to happen again, he spoke to his lawyers about his idea and formed the first type of credit card – Diner’s Club.

Back then, however, the limitations of computing made a lot of difficulties. For a start, nobody could confirm the buyer was the owner of the card, with the early versions just being printed paper with a name and signature, no built-in chips or expansive database. The card wasn’t an instant payment either, it was essentially an IOU at first.

 

Many then followed in Diner’s Club’s footsteps. American Express and Carte Blanche worked in much the same way, recording a monthly bill of all payments made through the card’s services, and were categorised as travel and entertainment cards.

It wasn’t until BankAmerica and InterBank Master Charge cards, which would eventually evolve into Visa and MasterCard respectively, that true credit cards fully came into existence. The banks would allow their customers to pay the bills from their transactions over time through the cards’ credit scheme.

 

In the 1950s, when computers were a rarity, only telephones could be used to confirm a purchase before making the sale. As expected, fraud eventually appeared for these transactions, leading to the first measures to prevent this being brought in. The first attempt at this was through voice authorisation. The companies who manufacture the cards would have a call centre that merchants would have to call in order for a transaction to be made. This system has survived to the current day, even if now relegated to a secondary option.

 

Audio responses by the card issuers were next, in which merchants would call them to enter the card holder’s information, which would verify the purchase. When touch-tone phones became the norm, this changed to merchants entering the information using the keypad, with the system then either issuing an approval code or declining it. Despite the improvements made to reduce fraud, card issuers wanted to make the purchases even more secure and haven’t stopped working on new ways to avoid this danger.

 

The Rise Of The Chip

It was then that magnetic stripes became used on the back of cards, carrying information that could identify the card holder and either approve or decline the purchase based on the current card holder’s information. Whilst an improvement, it carried its fair share of problems, due to it being easy to use once stolen and can be duplicated easily.

Due to these problems, the Chips were developed. The first case of this was a joint project between Europay, MasterCard and Visa in Europe called the EMV. It encrypted the data during the transaction by creating a temporary token to send to the company authorising the card to verify the payment. Offline transactions at the time of the chip’s introduction weren’t as secure, but required less steps and were a useful option if a merchant didn’t want traffic to become too much for their network.

 

Though at first contact chips requiring the chip and PIN format was the only option and required physical contact to work, contactless has now appeared and become a staple form of payment.

 

Contact Chip

There’s little that needs to be said on how Chip and PIN functions. You sign in to make a purchase with your PIN number after inserting the card and confirm it. There was originally the Chip and Signature option, though that quickly became irrelevant in Europe, and is starting to fall off in America. Signatures were too easy to forge, and most merchants couldn’t verify the signatures matched perfectly.

Both credit and debit cards now use the Chip and PIN system to enter into an ATM for a transaction, with the card issuer being able to inform you of whether or not your card is capable of using the system. In the rare case Chip and PIN isn’t an option, it will still be useable in Europe with human assistance.

 

Contactless Chip

Contactless chips use Near Field Communications (NFC) as their protocol, allowing for wireless communication with a terminal that is the cause of them needing only a tap against the transaction device.

As expected, the only real difference in use is that contactless cards are far faster.

The problem with the contactless option, however, is that someone with technology capable of Radio-Frequency Identification (RFID) can steal the information if close enough; being behind them in a queue, for instance. A metal or tinfoil card case is a good way to prevent this as the metal casing blocks the radio waves used in RFID.

 

Here, we reach the current state of card security. It’s evident that a lot of development has gone into bringing credit cards to their current form of payments and protection and though there is still room for improvement, we have reached a level in which most transactions can occur without the slightest worry.

 

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Pros and cons of a cashless society

In the current market, a cashless system is often promoted as the future of shopping- which it already is to some extent. A lot of countries are starting to adopt this slowly, with the intention of phasing out cash in the not too distant future. Here’s our list of things that are good and bad about it:

 

Why Go Cashless?

#1 – Crime Reduction

The phasing out of cash will eliminate a number of crimes involving money- think laundering, counterfeiting, bribery and the buying of things that would require untracked cash (from drugs to weapons). You’ll no longer have to have staff constantly counting money, and stores will be a lot less appealing to people for break-ins without cash in the till.

In fact, recent studies in the Access to Cash Review show that 36% of people consider cashless businesses an important part of reducing crime. Another statistic is from Paymentsense, in which 31% of business owners said that bringing in new technology for finances helped make them feel more secure about their business.

 

#2 – No Need For Banks

Going to the bank to deposit money can be quite the chore, especially if it’s far away. Many branches, especially in small villages, are disappearing one after the other. For example, the HSBC in the North Yorkshire village of Kirkbymoorside closed around two years ago and left the only option of withdrawing money through ATMs in local shops, forcing members to travel elsewhere.

Removing cash stops this problem, as it makes it a lot more convenient for users to live their daily lives without ever needing to take out money.

On the subject of finances, the cost of implementing credit services will lower after their use reaches a certain threshold, with the costs for most cashless businesses for their credit card payments only being 1% of the transaction.

 

#3 – It’s coming anyway

Compared to the good old exchange of cash, we’re now living in what the previous generation would see as a sci-fi pipe dream. Fingerprint and eye scans aren’t rare, tapping a card against a sensor is enough to make a payment and there is no sign of slowing when it comes to payment options.

 

Access to Cash Review has even said that current trends in e-commerce make 2026 the estimated year where cash’s use completely stops. In their most recent data, it’s been shown that cash only makes up 13% of rent payments, 10% for gas, electricity or water and 8% for TV licensing.

Meanwhile, cash makes up 86% of newspaper payments, and considering the outdated nature of this medium, it can be inferred that cash is the preference of the older generation. With that said, the fading away of cash will stay gradual and constant as time goes on, along with the switch to online news.

 

#4- It’s easier for tourists

No more converting! In a cashless world, people can just take their card travelling and won’t have to worry about losing a large percentage of your money every time you want to switch over.

 

#5- Stops using resources

Coins and notes are made out of a lot of materials, and we’d have a lot more copper, nickel and steel if we stopped production and melted down all our coins. Copper ranks as the third-most used industrial metal in the world after iron and aluminium, according to the U.S. Geological Survey (USGS), so it would be useful to not have to use so much on money.

 

Why Not To Go Cashless

#1 – Crime will always be a thing

On the flip side to what’s been mentioned, there are other forms of crime that will increase as cashless society becomes the norm, with shop-robbers being replaced with hackers. The data breaches in businesses have grown as they become less reliant on cash, with hacking also holding the risk of the leaking of personal information.

 

#2 – Potential problems for those with less access

Not everyone benefits from this system. Access to Cash has said that specifically 17% of the population will struggle when cash fades away from society. With cash machines closing down at around 300 per month, those who don’t have a bank account, or the internet, may find it increasingly difficult to live as they did normally.

It’s been found that cash can help poorer people organise budgeting better, and generally offer them peace of mind. On top of that, over 1.3 million people in the UK don’t have a bank account, particularly those in the teenage range and below. This is a thing that needs to change if we’re ever going to make the transition to cash-free.

 

#3 – Blackouts

Blackouts aren’t hugely often in the grand scheme of things, but still occur somewhere in the world once a day on average. This is a big issue in a cashless society, because it would mean nobody would have access to their funds.

For the many small businesses in rural areas, an untimely blackout could mean closing your business down for a brief amount of time, which is a pretty big reason to think about system stability before going completely cashless. That being said, things like this are bound to happen and usually get solved quickly.

 

#4 – Other teething problems

Without cash, there doesn’t seem to be a widely accepted way to tip service workers yet, but some companies do this well- like Uber giving you an option to add a tip while paying on the app. Charity boxes are also something that will have to evolve too, but there are already card accepting ones being created.

 

Conclusion – Which Is Best?

There aren’t any completely cashless countries yet, but this is changing, and we can find out the answer to this question properly over time, starting in Sweden. Both sides have many pros and cons, but I would say cashless sounds better in theory. However, we’ll see!

 

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We here at CheaperPay can help your company accept card. According to Santander, 60% said they would use small businesses more often if they could pay using cards. Visit http://cheaperpay.me/request-a-quote/ for a FREE quote.

Contactless- How will it evolve?

Contactless cards have been on the rise for the past few years and as far as tech has come, it can’t be denied that this is the best option for card payments. Being able to just tap your card against a machine for a near-instant payment is overall far better in terms of saving both your staff’s time and customers’ time.

That being said, it can still be improved. Here are a few things we can probably expect from contactless in the near future:

 

The Current Statistics

Whilst contactless payments have yet to fully dominate global trade, they are on a definite rise. A recent infographic by VISA showed that 40% of in-person payments are now done through contactless means. Statistics on moneysupermarket.com‘s website note that from their surveys, 59% of people find the push to accept contactless as the main form of payment is overall a more efficient option.

There are many places in which this option is becoming the majority. In Canada, the figure for contactless payments is 75%.

This rise in such a short span of time is a notable change in how the world pays for things, with many countries’ economies going from a single digit percentage to becoming half or more of payments within the span of two years.

There are some areas in which contactless hasn’t taken full form, however. In Latin America as a whole, only 25% of payments are contactless.

Based on previous trends in marketing, there’s a two-year difference between a new technology’s introduction and most of the population accepting it as the standard. That said, it can be anticipated that contactless may make up the majority of payments as early as next year, or at least grow considerably.

 

Amazon will still push the boundaries

As is always the case with e-commerce, Amazon may be the one to dictate the new direction. Their latest idea is a self-service shop controlled by many cameras and sensors, with the shopper’s card being billed immediately upon leaving without wasting time on check outs or queues.

 

This kind of self-service could help revolutionise shopping of all kinds, and will most likely start with things that are readily available online but has the potential to grow to things like food. With strong security, this can work as a trustworthy system for business that will offer major changes to the industry, and save huge amounts of time for customers.

 

Terminals will finally be improved

When cards change, the terminals they use will too.

Despite the updates to POS terminals having been minimal ever since their introduction in the 80s, the changes in cards in the contactless age has finally warranted this area of technology to be improved. The terminal website myPOS has made strides in how payment transactions are made, allowing for contactless payments to be performed anywhere using portable terminals and apps. Expect this to catch on.

 

Even more people will adopt it

Despite the new innovations being made, fixing the flaws of the current system are just as important. In the UK, three million businesses have yet to use contactless and consider sticking purely to cash far more cost-effective, likely due to not wanting to spend money on implementing new technology, or fixing issues that cash just doesn’t have like machines not scanning.

 

Limiting payment options, however, is a bad move that can result in you getting far less profit than you potentially could, with businesses accepting contactless earning on average 10% more revenue. Alongside that, there are a lot more positives with contactless, like not needing to count money or worry about it being secure in-store.

 

Indeed, this isn’t a flaw in the function of contactless, but more something that people will become more educated on in the future. It’s important for more businesses to become aware of the benefits of contactless, and this will happen over time.

 

Improvements in Security

One thing that will need to be improved at the same rate as the technology itself is the security to protect it. Preventing fraud is always an essential focus, no matter what the payment option is. Along with the more traditional problems, there is the risk of wireless technology being used to scan your card and steal its assets without you knowing.

 

Having built in fingerprint sensors is a way many companies are countering this risk. Others focus on a large ID database, in which a customer’s payment ID will be temporarily accessed by the company so as to make the transaction more secure.

 

For some, a current flaw in the system is the limit for contactless cards being £30 for a single payment in the UK, though this is certain to increase in the future as both the popularity of contactless payments and the security behind them both increase.

 

The American Market

Despite the size and strength of America’s economy, contactless payments are an area they’re severely lagging behind in. An extremely large portion of shops still deal with only cash, with the others accepting more of a Swipe and Sign system.

 

Though some US companies are looking to expand on this area after seeing how it’s worked out for other countries, some work on America’s payment system will be needed for them to catch up. These requirements would include:

 

  • Reduced stigma on alternative payment methods from consumers
  • Encouragement by credit companies to issue these cards to more applicants.
  • Shop owners to fully catch on

 

Contactless being overtaken?

Though it’s unlikely for the more standard debit card transaction to become obsolete in the near future, the use of it will help pave the way towards the popularity of contactless payments in places it’s yet to fully take off, such as the previous example, America. We should expect Chip and Pin to become the most popular before the landscape shifts to contactless.

Next, we should expect to see mobile payments rising, maybe even above contactless. Then, who knows!

 

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America Catching On With Contactless

To many, the global superpower that is the United States can seem like the trendsetter that the rest of the world follows. In terms of how they pay for things, however, it is pretty far behind Europe and Asia. A study available here by A.T. Kearney last year showed that only 3% of US cards are contactless, compared to the UK’s 64% and South Korea’s 96%.

 

Why America is lagging behind

The faster alternative to chip and PIN, that only requires tapping it on a checkout terminal for the transaction, haven’t taken over the US mainly due to the size of the market. It is far easier to make changes to a comparatively small country like the UK compared to one of the world’s largest countries that has a far vaster amount of different retail stores and banks. The method of introduction also played a key part in this difference. Almost five years ago, when the UK first introduced contactless cards to the public, it was done through the popular travel option of public transport. Three years later, the number of contactless cards in the UK had already reached 119 million, accounting for 78% of debit cards and 62% of credit cards in use based on UK Finance statistics.

 

By contrast, the US don’t even use a regular credit card for public transport most of the time. In fact, chip and PIN could even be seen as a work in progress in America with how many retailers are just getting used to it, so contactless is clearly not held in high regards over the pond. Despite this, chip and PIN is growing more accepted over time, with retailers who don’t install chip technology to prevent fraud being held accountable as of 2015.

 

This has a silver lining, however, as it’ll make the transition towards the contactless system far easier for America. Most of the new card readers installed after the 2015 changes already have contactless technology built into them, giving Americans the option if they don’t trust it.

Last year, J.P. Morgan expressed desires to provide millions of contactless cards to customers and by the end of this year, Visa hopes the number of contactless cards in the US to have reached 100 million.

 

Whilst that seems like an overly ambitious goal for some, it’s what many banks and card issuers will be striving toward, as A.T. Kearney has already estimated banks could make a $2.4 billion profit from card earnings across the next five years by introducing contactless cards as a widespread system.

Research has also shown most contactless card payments will be used for mundane things such as grocery shopping, fast-food and clinic payments, as many people will want to pay for these generic tasks quickly and conveniently. That’s the way it is here due to our £30 limit on contactless payments to eliminate fraud- and the US may implement a similar policy.

 

Credit Cards in the US

Two years ago, the payments from all types of cards in the US (other than contactless), amounted to $6.6 trillion according to the Federal Reserve. Whilst this may seem like a giant amount, analysts believe it could be far greater if payment options such as contactless became popular in the country’s market.

 

A big bite for Apple

Beyond the banks and card issuers, there’s another party benefiting from the increase of contactless cards coming to America; the tech giant Apple. The payment service ApplePay acts as a contactless payment option for iPhone, Apple Watch, iPad, and Mac, and they’d reap the rewards of a contactless-loving USA.

 

Why Americans are scared of contactless

No option is ever perfect, as many worry about the security of contactless options. Despite evidence from financial experts presenting it as every bit as secure as chip and PIN, the public’s natural scepticism of new ideas have caused many to worry about the safety of this option.

Contrary to this belief, however, contactless cards have far less chance of counterfeit problems due to the chips placed into them, making them an even safer option. On top of this, creating a maximum spend on contactless would stop people from stealing a card and emptying a bank account quickly.

Despite the fear some have of contactless cards in America, they are on the rise now and will only continue to grow. The US has started moving towards the cashless society the rest of the world is nearing, and contactless will be the figurehead of that.

 

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Contactless payments are ready to donate a helping hand!

Contactless Payments are set to become increasingly involved in charity fundraising appeals. The move comes as statistics published late last year showed an incredible rise in the amount of money spent with contactless devices.
According to the UK Card Association, November 2016 saw a £2,903m spend in the UK through contactless mediums – an incredible 183% rise on the previous year.
Now, that incredible figure is set to be translated onto the fundraising scene, with many charities recognising that people are more inclined to spend contactlessly than with spare cash.
Some major charities have already began trialling the scheme, with the 2015 Red Nose Day producing statues that housed contactless payment points where people could donate.
Furthermore, The Blue Cross then introduced a scheme in 2016 where people could ‘Pat and Tap’ the dogs on show to donate £2.
With contactless payments on the rise, the increasing ingenuity of charities to use these schemes as a means of increasing fundraising totals is something that will definitely increase during the coming months and years.

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Tech note, everyone – wearable technology is on the move!

We have often associated wearable technology with the fitness industry. Companies such as FitBit have produced spectacular results in this field, harnessing the ability to track and manage anything from distance run to calories burned over a certain period of time.
However, wearable tech is now leaving the wellbeing scene behind and advancing on to a period of world domination.
Advanced wearable biometrics can be used as a form of authentication for a number of things.
NEC corporation has recently adopted the software to identify people placed on ear readings – something previously unprecedented in the industry.
“The system enables biometric authentication via the otoacoustic emission, a sound made by the inner ear when the cochlea is stimulated, arising from the vibration of hair cells,” reports mobileidworld.
“According to a statement from NEC, its earbud device’s “otoacoustic authentication technology… recognizes the characteristics of a user’s ear”, suggesting that the emission is used to map the shape of the inner ear, which is presumably unique to the individual.”
The advancement of contactless, wearable technology is a clear indication of the continued progress of our industry.
The technical possibilities are endless – and NEC confirms this with future plans to commercialise the technology soon.
NEC plans to offer “services that combine individual authentication, indoor positioning, acoustic AR (augmented reality), vital sensing and other technologies”, according to NEC Business Development Division General Manager Tomonori Kumagai.
The contactless revolution has only just begun – don’t get left behind.

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Why the new £1 coin could be the last ever made as Britain moves towards a cashless society

The two-tone pound coin boasts innovative security features which supposedly make it the most secure on the planet. It is also the first UK coin in circulation since the threepenny bit to feature a design of octagonal proportions.

But despite its impressive design, there’s every chance that this will be the last £1 coin in the history of our currency.

Why?

The decline of coins and notes is not just being driven by the convenience of alternative, more high-tech payment methods – it’s also because of the simple fact that cash costs money to make!

The UK is a world leader when it comes to alternative payments. In 2015 alone, Brits spent over £21bn via contactless payments – more than any other country on the continent.

This explains why every business, from popular chains to pop-ups, know that their customers expect to be able to pay by their card, mobile, or wearable device – and over 17.m UK businesses now accept payment cards.

As if we needed any more proof that it’s time to convert to contactless and mobile payments, we now officially have it!

Get in touch with a member of our team today to identify the payment solutions that are perfect for YOUR business.

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Reasons why your Business NEEDS to make the switch to contactless payment solutions

More than just a saying or statistic, it has become reality that ‘Businesses that decline card payments are losing out’.

Sorry, we don’t take card payments’ should be a thing of the past as Britain quickly converts to a cashless society, not taking card payments should be something rarely heard of by now. Unfortunately, this is not the case just yet. 75% of all UK retail purchases are made by card; and yet still, more than two thirds of British small to medium sized businesses (SMEs) still don’t accept card payments.

With Cheaper PAY’ment solutions you can:

  • Accept Payments over the phone
  • Accept online Payments
  • Accept smart phone payments
  • Accept Chip ‘n’ Pin payments

How will these benefit your business?

  • Never miss a sale – Customers are able to buy your products anywhere at any time with secure online payments which means more sales for your business.
  • Beat your competitors – Customers are more likely to shop at a store that offers card payments.
  • Happier customers – Card payments are processed in a matter of seconds so customers can quickly continue with their day and you can get on with serving the next customer.
  • Lower bank fees – Handling less cash means fewer trips to the bank and more money back into your business.
  • More security – Extra features protect your business from fraudulent transactions and tell you immediately if a customer’s funds have not yet cleared.

Our low transaction costs are what make Cheaper Pay one of the most affordable merchant service suppliers available. Many card machine companies will charge you for a service that is designed to benefit growing businesses rather than hinder them.

At Cheaper Pay, we believe in supporting and innovating businesses with evolving technology. That is why we offer FREE quotes and a 3 months’ free trial to ensure that the payment solution you have chosen is compatible for your business.

To begin your journey to contactless payment get your free quote HERE.

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Take Payments Over the Phone

phone payments

We can help you get your business ready to take payments over the phone. Enquire today and get a free quote!

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How card payments have developed over the past decade

Over the past decade, UK consumers have adapted to the quick pace in which technology develops, including the way they pay for goods. Payments made on cards now account for 78.5% of all retail purchases, a huge increase from just 55% back in 2006!

 

2006 – 2008

One of the main reasons for this huge increase is the adoption of payment methods such as Chip and PIN and contactless, making card payments faster than using cash and allowing business owners to reduce the amount of queuing time. This benefit has led to an increase in the amount of independent businesses deciding to accept card payments of a massive 43% since 2006.

 

2008 – 2010

Consumer spending patterns continue to change to match the technology with fewer people in the UK actually carrying cash because they are quickly discovering the convenience and security of cashless payments.  There is no doubt that numerous retailers and banks are starting to see the changes in how people prefer to pay for their in-store purchases and are now more inclined to encourage customers to carry less cash and pay for smaller purchases (usually below the sum of £30) on card with ‘tap and go’ contactless payments.

 

2010 – 2015

Growth in unattended retail terminals in supermarkets, chemists and petrol stations has also boosted card use and debit cards are benefiting significantly from contactless payments, as their popularity for lower value everyday payments carries on increasing.

 

In January 2015, contactless spend in the UK totaled £287 million, rising rapidly throughout the year to reach £1.02 billion in November 2015 alone. In the same year, the number of contactless transactions carried out by consumers in Europe passed the one billion mark.

 

2016

Now that we’re in 2016, contactless mobile payment technologies, such as Apple Pay and Android Pay, have given consumers more choice in the way they want to pay. According to a report, 40% of consumers with an Apple device have adopted the Apple Pay service since its launch in July 2015.

 

It is predicted that over the next ten years, consumers will continue to favour using card payments to cash. Last year, nearly half of all payments were made in cash, however it is predicted that debit cards alone will overtake cash as the most frequently-used method of payment in just five years.

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Card Payments: The Cost Of Staying Static

More and more businesses are realising the potential of adopting card payments as well as cash transactions. With debit and credit cards being used as a consumer’s preferred payment method these days, it’s no wonder that the credit card industry is booming and contactless payments are taking off as much as they are.

However, as a small business, you may be concerned about the cost of having card payments, rather than the additional profit you’ll receive overall. These fears often lead to cash-only payment transactions for many small businesses, until they can accept card payments.

But when taking a look at the overall statistics of card payments, your business is more likely to succeed in the long term than fail.

The Statistics

Roughly, small businesses and SMEs who do not accept card payments are losing out on £8.8bn profit. £52.6 billion is spent by consumers using card payments in the UK with 70% of consumers prefer card to cash. Meanwhile, 32% of UK adults would not purchase from a store that did not accept card payments.

With these alarming statistics from the general UK public, it seems likely that a small business would struggle in it’s first year by not allowing card payments, unless the product was unique enough to suggest otherwise.

The Conclusion

Long term numbers and statistics are more reliable than short-term figures and your fears. Starting a new business comes with all kinds of risks, but being prepared is the most important factor when implementing new systems. Embrace the digital age and now!

Here at CheaperPay we understand the importance of reducing the costs for your new business. This is why we’re offering 3 months FREE when you sign up with us! Contact us for more information.